Category: Forex News, News

GBP/JPY Forecast – British Pound Continues to Grind Sideways Against Japanese Yen

GBP/JPY Forecast Video for 27.07.23

British Pound vs Japanese Yen Technical Analysis

In the trading session on Wednesday, the British pound pulled back a bit against the Japanese yen, hinting at a consolidation phase. Despite this temporary retreat, market analysis indicates that potential buyers may reenter the market, with a focus on the historical support zone around the ¥180 level. The proximity of the 50-Day Exponential Moving Average to this area further strengthens the possibility of a significant bounce.

Compared to other major currencies, the British pound has displayed robustness, thanks to proactive measures taken by the Bank of England to address significant inflation pressures. This resilience stands in contrast to the Bank of Japan’s strategy of quantitative easing, aimed at maintaining low interest rates, which has contributed to the depreciation of the Japanese yen.

If the market were to experience a breakdown below the 50-Day EMA, the British pound could face a decline towards the ¥175 level. Notably, this level has previously acted as a pivotal point for initiating upward momentum and remains a crucial support level to monitor.

On the flip side, a potential market turnaround leading to an upward surge beyond the ¥183 level may pave the way for potential gains towards ¥184 and even ¥185, with the latter serving as the intermediate target. Surpassing this level could result in further appreciation, and some market participants might set their sights on the ¥200 level in the long term, although achieving such a milestone may present challenges.

The struggles faced by the Japanese yen can be attributed to the country’s prolonged experiment with quantitative easing, which has had significant consequences in the Forex markets. As a result, bearish sentiment persists among certain traders towards the Japanese yen.

The recent pullback of the British pound against the Japanese yen has led to a consolidation phase, attracting the attention of potential buyers. The pivotal ¥180 level, reinforced by the proximity of the 50-Day EMA, holds key significance. The strength exhibited by the British pound underscores the Bank of England’s efforts to tackle inflation, while the Japanese yen continues to grapple with the repercussions of long-standing quantitative easing. For what is worth, the Bank of Japan has an interest rate decision on Friday, so this might be what the market is waiting on.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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